亚太地区-金属与采矿业-铁矿石价格高企需要钢铁价格走强才能维持，即便供应走弱也是如此.docx

Equity Research
Asia Pacific | Australia
Commodities Notes
High iron ore prices needs stronger steel prices to be sustained even with the weaker supply
Diversified Metals & Mining | Sector Review
We now suggest iron ore could remain in the US$125-US$150/t range in 2021 fluctuating with seasonal demand factors; and US$110-US$130/t in 2022, on the proviso that China steel rebar price rises to at least Rmb4200/t. With Vale downgrading 2021 iron ore production guidance, and Rio Tinto under pressure from the Juukan Gorge scandal, we’ve updated our High Case Iron Ore Scenario published with our Bulks Forecasts on 30 September. We consider the scenario’s China steel demand growth of 2% in 2021 is more in-line with our China economists’ upbeat view of % YoY growth in 2021 real estate investment than our base case of flat China steel demand. Cutting 26Mt & 25Mt from 2021& 2022 supply due to Vale and RIO delivers deficits of almost 50Mt in 2021 and 36Mt in 2022, on top of weaker port inventories than last year. But stronger prices need higher China steel prices to be sustainable and prevent steel mills cutting back on losses.
Figure 1: China’s port stocks and iron ore price

Research Analysts
Matthew Hope
61 2 8205 4669
matthew.******@credit-
180 150
iron ore price (62% Fines CFR)
160 140
140 130
45 port volume (Mt)
120 120
100 110
80 100
60 90
40 80
20 70
Jun 18
Aug 18
Oct 18
Dec 18
Feb 19
Apr 19
Jun 19
Aug 19
Oct 19
Dec 19
Feb 20
Apr 20
Jun 20
Aug 20
Oct 20
0 60
Pellet
Lump
Price (RHS)
45 Port iron ore fines Concentrate
Source: Mysteel, Fastmarkets, Credit Suisse estimates
Our original expectation of the China–Australia dispute settling in the new year and a resumption of the coal trade lifting Australian met coal prices now seems less likely, with the row worsening over the last week. It now seems that China will attempt to meet the coking coal supply gap with domestic coal, together with any other im